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Save More Tomorrow

In this new book from the Allianz Global Investors Center for Behavioral Finance, Professor Shlomo Benartzi offers practical behavioral finance solutions to improve 401k plans. It's the first comprehensive application of behavioral finance to improve retirement outcomes.

The Allianz Global Investors Center for Behavioral Finance

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The Save More Tomorrow Story

Back in 1996, two professors had an idea to increase savings within 401(k) plans. They knew that even employees who joined 401(k) plans saved little because they didn’t want to increase savings and see their paychecks shrink – a classic example of “loss aversion.” The professors also knew that most employees wanted to save more, but that this loss aversion, together with simple inertia, made increasing savings difficult. Their idea was to increase savings when workers got a pay raise, because when a portion of a raise goes into savings, employees don’t feel as though they’re losing. Their Save More Tomorrow program was first put in practice by a company in 1998, and the idea had since spread around the world.

Save More Tomorrow

Shlomo Benartzi: Saving for tomorrow, tomorrow

In November 2011, Professor Shlomo Benartzi, of the UCLA Anderson School of Management and Chief Behavioral Economist of the Allianz Global Investors Center for Behavioral Finance, spoke at the TED@AllianzGI conference. His topic was how behavioral finance, a combination of psychology and economics, can help people avoid making “money mistakes” associated with retirement planning. One of the most effective behavioral finance tools is Save More Tomorrow™, a savings enhancement program that helps people overcome behavioral challenges so they can save adequately for retirement. The program shows that behavioral finance not only works but is also extremely powerful. Professor Benartzi chose the program’s name as the title of his new book, Save More Tomorrow: practical behavioral finance solutions to improve 401(k) plans, which presents this and other behavioral finance tools that address a wide range of retirement planning mistakes.

Professor David Laibson: The Failure of Self Control

Dean Karlan: Increase the price of vice or lower the price of virtue?

At the TED@AllianzGI conference at the Time Warner Center, New York, professor Dean Karlan of Yale University focuses on the difference between debt and credit in developing economies and helps the audience understand the challenges in determining when savings and microcredit programs work, and when they don’t. He discusses how commitment strategies can improve the results of saving and microcredit programs in any economy.

Kathryn Schulz: Don't regret regret

Robert Sirota: Finding the Lost Chord

At the TED@AllianzGI conference at the Time Warner Center, New York, Robert Sirota, composer and president of the Manhattan School of Music, talks about how signs and signals affect the way we think and act – using music as the example. He discusses how creative people communicate, the choices they make, and the kind of outcomes they create.